Fitch Examines Top Servicers

According to the latest installment of Fitch’s[1] U.S. RMBS servicer handbook, the American servicing landscape is undergoing significant shifts, much of it driven by merger and acquisition activity among servicers such as Mr. Cooper and Ocwen.

'Strategic positioning and M&A activity are radically changing the mortgage servicing sector as we see it today,” said Fitch Managing Director Roelof Slump. “Perhaps most notable is one of the biggest names in the space in Nationstar Mortgage, LLC, (now rebranded as Mr. Cooper), which will be merging with WMIH Corporation in a transaction expected to close later this year. Meanwhile, Ocwen Financial (parent of Ocwen Loan Servicing, LLC) is working towards the acquisition of PHH Corporation, a residential mortgage servicer and originator.”

Even with mergers in the works, both Mr. Cooper and Ocwen’s servicing portfolios continued to scale back between Q3 2017 and Q4 2017. Mr. Cooper’s servicing portfolio dropped from $493.8 billion to $470.7 billion during that period, whereas Ocwen saw a similar decline from $181.6 billion to $173.3 billion.

JPMorgan Chase went from $821.8 billion in Q3 2017 to $816.4 billion in Q4 2017. On the other hand, Wells Fargo’s portfolio increased across the two quarters, rising from $1.46 trillion to $1.5 trillion. CitiMortgage, meanwhile, scaled back dramatically in Q4, shrinking its servicing portfolio from $172.6 billion to $137.5 billion. Flagstar Bank grew its servicing portfolio to $97.9 billion in Q4, up from $91.1 billion in Q3.

Many smaller nonbank servicers moved to pick up the slack in Q4, however, according to Fitch. Caliber Home Loans increased its servicing portfolio to $134.9 billion in Q4, up from just shy of $102 billion in Q4 2016. LoanCare jumped its servicing portfolio from $217.8 billion in Q3 2017 to $228.9 billion in Q4. Rushmore Loan Management Servicers increased its servicing portfolio from $25.1 billion in Q3 to $30.3 billion in Q4. Specialized Loan Servicing, LLC, saw its portfolio hit $71.8 billion in Q4, up from $62.9 billion in Q3 and $54.9 billion in Q4 2016.

Fitch also noted the addition of Planet Home Lending to the list of residential mortgage servicers it tracks and rates. Primarily involved in sub-servicing Ginnie Mae loans, Planet’s portfolio as of December 31, 2017, consisted of approximately 80,000 loans with a total unpaid principal balance of $12.7 billion.